Britons lending their friends £510m a year

Generous Britons are handing £510 million a year in loans to their friends and family, with the average amount lent at £116.

But while helping out a friend in distress might seem the right thing to do, it can have consequences reaching further than your bank balance - with 3.5 million people saying they have fallen out with their friends over an informal loan.

Some 29 per cent of fallings out were over loans of under £100.

"As millions of Brits find that borrowing from or lending money to a friend resulted in the loss of a friendship we've seen that people can fall out over the smallest amounts of money," said head of Abbey Loans Paul Morrish.

Overall, some 4.4 million people lent £50 or more to a mate in the last year, with the top reason to hand over some cash being to tide someone over until pay day, figures from Abbey reveal.

The second biggest reasons friends hand over cash is to pay off personal debts, with holidays, car purchases and home improvements also on the list of reasons to lend.

Helping set up a business, buying presents for partners and covering medical expenses were also cited by Britons as reasons to lend money to friends.

But those looking for larger amounts of cash might be better off paying a premium to keep their friendship intact.

"Those that need money for items such as cars, holidays, home improvements or even cosmetic surgery would be better off asking a bank to provide the funds, rather than risking a relationship meltdown," said Mr Morrish.